MNI BRIEF: SNB Cuts Policy Rate To 0.25%, Outlook Uncertain
MNI (LONDON) - The Swiss National Bank cut its benchmark Policy Rate by 25 basis points to 0.25%, saying that this would ensure that "monetary conditions remain appropriate, given the low inflationary pressure and the heightened downside risks to inflation."
Banks’ sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold, and at 0% above
this threshold. The SNB said it remains remains willing to act in the foreign exchange market as necessary. (See MNI SNB WATCH: Swiss Set To Cut, But End Point In Sight)
The SNB's updated inflation outlook was"hardly changed from December, with average annual inflation at 0.4% for 2025, 0.8% for 2026 and 0.8% for 2027. The forecast is based on the assumption that the SNB policy rate is 0.25% over the entire forecast horizon.
According to the SNB Board, the economic outlook has become considerably more uncertain, mainly from external risks. "Against the backdrop of increased trade and geopolitical uncertainties worldwide, developments abroad continue to represent the main risk."